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DHI vs MTH
Which Stock Would AI Choose? D.R. Horton (DHI) vs. Meritage Homes (MTH) Stock Comparison
Key Takeaways
- D.R. Horton (DHI) is the largest U.S. homebuilder by volume, while Meritage Homes (MTH) is a smaller, Sun Belt–focused builder of entry-level and first move-up homes.
- Both companies face the same macro headwinds: elevated mortgage rates, affordability constraints, and rising sales incentives that are compressing margins.
- DHI continues to deliver scale, diversification, and heavy shareholder returns, even as earnings moderate; MTH has reported steeper year-over-year declines in revenue and earnings per share (EPS).
- DHI trades at a higher but still measured valuation, while MTH carries a lower multiple and a cleaner balance sheet, reflecting its smaller, more cyclical profile.
- Relative momentum currently favors DHI, whose more diversified platform has shown greater stability in a softening housing market.
Introduction
D.R. Horton and Meritage Homes are two prominent names in U.S. residential construction, and their contrasting scale and strategies make them a natural stock comparison for investors tracking the housing cycle. DHI is the nation's largest builder by closings, with a national footprint and a diversified business that includes rental, lot development, and financial services operations. MTH is a regional specialist concentrated in high-growth Sun Belt markets, competing primarily on energy-efficient, affordable homes and rapid move-in-ready inventory. With mortgage rates still weighing on affordability and buyer sentiment, both companies are managing the same demand slowdown in different ways. This relative performance review examines recent results, market positioning, and the factors an AI-driven framework would weigh when ranking the two stocks.
DHI Overview and Recent Performance
D.R. Horton is the largest homebuilder in the United States by volume and has been since 2002. Its national scale spans entry-level, move-up, and luxury communities, and it operates complementary businesses including Forestar (lot development), a rental division, and a captive mortgage and financial services segment. This diversification gives DHI multiple revenue and earnings streams beyond core homebuilding.
In recent quarters, DHI has shown resilience at the top line while absorbing margin pressure. In its most recent fiscal quarter, the company reported EPS of $3.20, beating consensus estimates, with consolidated revenue of roughly $9.2 billion and about 23,983 homes closed, up 4% year over year. Home sales gross margin slipped to 20.7% from 21.8% a year earlier, and the cancellation rate rose to 20% from 17%, reflecting affordability constraints. Management trimmed its full-year revenue and closings guidance, signaling a measured sales pace rather than a rapid recovery. Offsetting this, DHI continues to return substantial cash to shareholders, targeting roughly $2.5 billion in buybacks and about $500 million in dividends for the fiscal year, supported by a strong liquidity position and disciplined capital allocation.
MTH Overview and Recent Performance
Meritage Homes is the fifth-largest public homebuilder in the U.S., operating across roughly 12 states concentrated in the Sun Belt and Southeast. The company specializes in energy-efficient, affordable entry-level and first move-up homes, and it has built a strategy around quick move-in-ready inventory, a 60-day closing guarantee, and faster build cycle times that have held below 110 days for several consecutive quarters.
MTH's recent results have reflected a tougher selling environment. In its latest quarter, home closing revenue fell about 14% year over year to approximately $1.4 billion, while orders declined 9% and the average absorption pace dropped 19%. Reported home closing gross margin narrowed to 18.3%, down roughly 280 basis points from the prior year, and GAAP diluted EPS declined about 33% to $1.37. On a positive note, MTH maintained disciplined cost control, reduced finished speculative inventory by more than 40%, and grew its community count about 9% year over year. The company also increased shareholder returns, repurchasing shares at a discount to book value and raising its dividend, while keeping a low net debt-to-capital ratio of 17.1%.
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Head-to-Head Comparison
The core contrast between these two builders is scale versus focus. DHI's national footprint, vertically integrated lot supply through Forestar, and financial services arm provide multiple levers to manage a downturn, but its sheer size makes it more exposed to broad housing affordability trends. MTH's concentration in faster-growing Sun Belt states offers leverage to population and migration tailwinds, yet it leaves the company more sensitive to localized softening and geographic mix shifts.
On recent momentum, DHI has held up better. Its top line stayed roughly flat even as margins compressed, while MTH posted double-digit revenue and earnings declines. Both companies are contending with elevated incentives and higher-cost land vintages, but DHI's diversified income streams have cushioned the impact. MTH, by contrast, has leaned on cost reductions, faster cycle times, and share repurchases below book value to defend returns.
Risk profiles differ as well. MTH's lower valuation (single-digit forward P/E in some recent periods) and stronger net leverage position appeal to value-oriented investors, but its earnings visibility is thinner. DHI commands a higher multiple and offers steadier, cash-generative operations, though its guidance cuts and rising cancellation rate suggest demand remains fragile. Ultimately, DHI represents stability and diversification, while MTH represents a higher-beta wager on a housing recovery in growth markets.
Tickeron AI Verdict
Based on observable trend consistency, stability, and relative positioning, Tickeron's AI would likely lean toward D.R. Horton (DHI) in the current environment. The company's diversified revenue base, more resilient top line, strong cash generation, and sustained capital returns provide a steadier trend profile than Meritage's (MTH) deeper cyclical drawdown. That said, the verdict is probabilistic rather than definitive: MTH's lower valuation, cleaner balance sheet, and community growth could make it a more compelling candidate if mortgage rates ease and entry-level demand re-accelerates. A momentum- and stability-weighted AI framework would favor DHI today, while acknowledging that MTH offers a higher-risk, higher-reward setup for investors with a more contrarian, recovery-oriented outlook.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is DHI is a Buy and MTH is a Buy.
DHI in upward trend: 10-day moving average moved above 50-day moving average on October 27, 2026
The 10-day moving average for DHI crossed bullishly above the 50-day moving average on October 27, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 10 of 13 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 77%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 15, 2026. You may want to consider a long position or call options on DHI as a result. In 59 of 85 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 69%.
The Moving Average Convergence Divergence (MACD) for DHI just turned positive on October 15, 2026. Looking at past instances where DHI's MACD turned positive, the stock continued to rise in 34 of 50 cases over the following month. The odds of a continued upward trend are 68%.
DHI moved above its 50-day moving average on October 22, 2026 date and that indicates a change from a downward trend to an upward trend.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 6 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where DHI declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 63%.
DHI broke above its upper Bollinger Band on October 22, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for DHI entered a downward trend on October 21, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 36 (best 1 - 100 worst), pointing to average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 48 (best 1 - 100 worst), indicating steady price growth. DHI’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 51 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 68, placing this stock slightly better than average.
The Tickeron SMR rating for this company is 62 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 78 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.714) is normal, around the industry mean (1.826). P/E Ratio (13.878) is within average values for comparable stocks, (9.881). Projected Growth (PEG Ratio) (1.171) is also within normal values, averaging (1.217). Dividend Yield (0.012) settles around the average of (0.019) among similar stocks. P/S Ratio (1.205) is also within normal values, averaging (24.205).
The Tickeron Seasonality Score of 85 (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
MTH's RSI Oscillator ascending out of oversold territory
The RSI Oscillator for MTH moved out of oversold territory on October 15, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 27 similar instances when the indicator left oversold territory. In 23 of the 27 cases the stock moved higher. This puts the odds of a move higher at 85%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 22, 2026. You may want to consider a long position or call options on MTH as a result. In 55 of 81 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 68%.
The Moving Average Convergence Divergence (MACD) for MTH just turned positive on October 20, 2026. Looking at past instances where MTH's MACD turned positive, the stock continued to rise in 37 of 53 cases over the following month. The odds of a continued upward trend are 70%.
MTH moved above its 50-day moving average on October 29, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +8.21% 3-day Advance, the price is estimated to grow further. Considering data from situations where MTH advanced for three days, in 200 of 291 cases, the price rose further within the following month. The odds of a continued upward trend are 69%.
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 6 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The 50-day moving average for MTH moved below the 200-day moving average on October 01, 2026. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where MTH declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 70%.
MTH broke above its upper Bollinger Band on October 22, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for MTH entered a downward trend on October 23, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 9 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of 45 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.831) is normal, around the industry mean (1.826). P/E Ratio (13.348) is within average values for comparable stocks, (9.881). Projected Growth (PEG Ratio) (0.090) is also within normal values, averaging (1.217). Dividend Yield (0.030) settles around the average of (0.019) among similar stocks. P/S Ratio (0.814) is also within normal values, averaging (24.205).
The Tickeron Seasonality Score of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron Price Growth Rating for this company is 56 (best 1 - 100 worst), indicating steady price growth. MTH’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is 68 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. MTH’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 68, placing this stock worse than average.
The Tickeron SMR rating for this company is 80 (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
DHI | MTH | ||
|---|---|---|---|
OUTLOOK RATING 1..100 | 68 | 15 | |
VALUATION overvalued / fair valued / undervalued 1..100 | 78 Overvalued | 45 Fair valued | |
PROFIT vs RISK RATING 1..100 | 51 | 68 | |
SMR RATING 1..100 | 62 | 80 | |
PRICE GROWTH RATING 1..100 | 48 | 56 | |
P/E GROWTH RATING 1..100 | 36 | 9 | |
SEASONALITY SCORE 1..100 | 85 | 50 |
Tickeron ratings are formulated such that a rating of 1 designates the most successful stocks in a given industry, while a rating of 100 points to the least successful stocks for that industry.
MTH's Valuation (45) in the Homebuilding industry is somewhat better than the same rating for DHI (78). This means that MTH’s stock grew somewhat faster than DHI’s over the last 12 months.
DHI's Profit vs Risk Rating (51) in the Homebuilding industry is in the same range as MTH (68). This means that DHI’s stock grew similarly to MTH’s over the last 12 months.
DHI's SMR Rating (62) in the Homebuilding industry is in the same range as MTH (80). This means that DHI’s stock grew similarly to MTH’s over the last 12 months.
DHI's Price Growth Rating (48) in the Homebuilding industry is in the same range as MTH (56). This means that DHI’s stock grew similarly to MTH’s over the last 12 months.
MTH's P/E Growth Rating (9) in the Homebuilding industry is in the same range as DHI (36). This means that MTH’s stock grew similarly to DHI’s over the last 12 months.
| DHI | MTH | |
|---|---|---|
| RSI ODDS (%) | N/A | 2 days ago 85% |
| Stochastic ODDS (%) | 2 days ago 66% | 2 days ago 77% |
| Momentum ODDS (%) | 2 days ago 69% | 2 days ago 68% |
| MACD ODDS (%) | 2 days ago 68% | 2 days ago 70% |
| TrendWeek ODDS (%) | 2 days ago 68% | 2 days ago 69% |
| TrendMonth ODDS (%) | 2 days ago 66% | 2 days ago 67% |
| Advances ODDS (%) | N/A | 9 days ago 69% |
| Declines ODDS (%) | 6 days ago 63% | 13 days ago 70% |
| BollingerBands ODDS (%) | 2 days ago 60% | 2 days ago 70% |
| Aroon ODDS (%) | 2 days ago 67% | 2 days ago 67% |
Long-Term Analysis
It is best to consider a long-term outlook for a ticker by using Fundamental Analysis (FA) ratings. The rating of 1 to 100, where 1 is best and 100 is worst, is divided into thirds. The first third (a green rating of 1-33) indicates that the ticker is undervalued; the second third (a grey number between 34 and 66) means that the ticker is valued fairly; and the last third (red number of 67 to 100) reflects that the ticker is overvalued. We use an FA Score to show how many ratings show the ticker to be undervalued (green) or overvalued (red).
DHI’s FA Score shows that 0 FA rating(s) are green while MTH’s FA Score has 1 green FA rating(s).
- DHI’s FA Score: 0 green, 5 red.
- MTH’s FA Score: 1 green, 4 red.
Short-Term Analysis
It is best to consider a short-term outlook for a ticker by using Technical Analysis (TA) indicators. We use Odds of Success as the percentage of outcomes which confirm successful trade signals in the past.
If the Odds of Success (the likelihood of the continuation of a trend) for each indicator are greater than 50%, then the generated signal is confirmed. A green percentage from 90% to 51% indicates that the ticker is in a bullish trend. A red percentage from 90% - 51% indicates that the ticker is in a bearish trend. All grey percentages are below 50% and are considered not to confirm the trend signal.
DHI’s TA Score shows that 4 TA indicator(s) are bullish while MTH’s TA Score has 5 bullish TA indicator(s).
- DHI’s TA Score: 4 bullish, 4 bearish.
- MTH’s TA Score: 5 bullish, 5 bearish.
Price Growth
DHI (@Homebuilding) experienced а -1.00% price change this week, while MTH (@Homebuilding) price change was +0.44% for the same time period.
The average weekly price growth across all stocks in the @Homebuilding industry was -0.09%. For the same industry, the average monthly price growth was -2.42%, and the average quarterly price growth was -0.38%.
Reported Earning Dates
DHI is expected to report earnings on Jan 26, 2027.
MTH is expected to report earnings on Feb 03, 2027.
Industries' Descriptions
@Homebuilding (-0.09% weekly)Homebuilding includes companies residential home construction companies, renovators and repair firms. The companies may be building single-family or multifamily homes, condominiums or mobile homes. Over the five years to 2019, the Home Builders industry is estimated to have grown at an annualized rate of 2.5% to reach $89.4 billion, (including expected growth of 2.6% in 2019), according to a study by IbisWorld. After having suffered one of its worst crises a decade ago during the last macroeconomic recession–which had much of its origins in U.S. real estate – the homebuilding industry has been recovering steadily so far. Higher disposable incomes and improving economic activity have bolstered consumers’ purchases of homes. While revenue of the Home Builders industry remains well below its prerecession high, demand growth estimates show promise.
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MTH and
Correlation & Price change
A.I.dvisor indicates that over the last year, MTH has been closely correlated with PHM. These tickers have moved in lockstep 89% of the time. This A.I.-generated data suggests there is a high statistical probability that if MTH jumps, then PHM could also see price increases.
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